Adani Energy Solutions Shares Surge Amid MSCI Index Inclusion

Shares of Adani Energy Solutions Ltd (AESL) surged by 3.8% as markets predict strong inflows following the company's re-inclusion in the MSCI India Index. MSCI lifted its embargo on Adani stocks, allowing recent equity changes to be eligible. Earlier in August, the company completed a significant USD 1 billion QIP.

Shares of Adani Energy Solutions Ltd (AESL) surged 3.8% during Wednesday's trading session, despite overall flat market conditions. Investors anticipate substantial inflows by the end of August, attributed to AESL's expected inclusion in the MSCI Index, with brokerage houses predicting inflows of USD 250 million.

On Tuesday, MSCI announced it had lifted its 'Embargo' on Adani Group stocks, making them eligible for inclusion in the MSCI India Index. This move comes after the stocks were removed in January 2023 due to uncertainties over their free-float.

The lifting of the restriction renders recent changes in free float and equity raises eligible for inclusion. Consequently, stocks previously excluded could be considered for re-inclusion.

In early August, Adani group's power transmission, distribution, and smart metering company executed a USD 1 billion QIP, significantly increasing the company's free float.

Additionally, Adani Enterprises, another group entity, has proposed a fundraising initiative of nearly USD 2 billion. Should it proceed, it could translate to USD 110 million of inflows, according to brokerage analysts.

Conversely, Adani Total Gas, which was also removed from the MSCI Index last year, is unlikely to be re-included soon as its stock is trading well below last year's peak.

(With inputs from agencies.)